April 18, 2024

Is Social Security Considered Retirement Income for Tax Purposes?

Is Social Security Considered Retirement Income for Tax Purposes?

Yes, Social Security is taxed as income for retirees – if the retiree’s combined income meets the minimum requirements. Combined income is your adjusted gross income (AGI) and nontaxable interest combined with half of your Social Security benefits.

Individual filers with a combined income over $25,000 to $34,000 or joint filers with a combined income of $32,000 to $44,000 will have to pay income tax on up to 50 percent of their benefits. Single filers with a combined income over $34,000 or joint filers with a combined income over $44,000 may need to pay taxes on up to 85 percent of their benefits.

You can request withholding through the SSA to make the process easier. Social Security beneficiaries should receive a copy of their SSA-1099 every January, but you can also request a copy through the Social Security Administration’s website.

Marginal tax rates can hit retirees particularly hard as they reach the taxable income thresholds. If you’re on the edge of either the 50 percent or 85 percent threshold, it may be in your best interest to speak with a financial advisor or professional tax preparer for guidance.

What If You Have a Roth IRA?

Unlike traditional IRAs, Roth IRAs are funded with after-tax dollars, meaning they aren’t taxed as income when they’re withdrawn and not included in your combined income calculation. Whether it makes sense to convert a traditional IRA into a Roth IRA in retirement and take the one-time tax hit depends on the unique circumstances of your income and financial situation. It’s likely in your best interest to discuss this and all your other options with experienced financial planners and tax preparers to learn more.

Should You Continue Working After Beginning to Receive Your Social Security Benefits?

This can be a tough question for many single filers and couples, especially given how combined income is calculated. An important factor to consider is when you begin taking benefits. Doing so before you reach full retirement age can have consequences, but it still might be the preferred choice for some workers and retirees.

The Social Security Administration considers you retired once you begin receiving your SS benefits. People who begin collecting their benefits prior to reaching full retirement age can potentially receive a reduced benefit amount if their annual earnings exceed the limit set by the SSA.

The reduced benefit amount varies depending on how early you begin taking SS. The minimum age to start receiving benefits is 62. You can find the full breakdown of the benefit reduction on the SSA’s website.

Social Security Benefit Deduction

If you begin collecting your benefits prior to reaching full retirement age (FRA), the SSA deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2024, the limit is $22,320.

You can find a detailed chart of full retirement age based on birth year on the Social Security Administration’s website, but the current breakdown as of 2024 is:

  • Born 1943 to 1954: Full retirement age is 66
  • Born 1955: Full retirement age is 66 and 2 months
  • Born 1956: Full retirement age is 66 and 4 months
  • Born 1957: Full retirement age is 66 and 6 months
  • Born 1958: Full retirement age is 66 and 8 months
  • Born 1959: Full retirement age is 66 and 10 months
  • Born 1960 or later: Full retirement age is 67

The deduction for wage earners is lower, but still present, during the year you reach full retirement age. The SSA will deduct $1 from your benefits for every $3 of income you earn over the 2024 limit of $59,520, but only for the months prior to reaching FRA.

Once you do reach full retirement age, your earnings will no longer reduce your benefits.

Are You Eligible for Social Security Benefits in Phoenix?

Social Security benefit strategies can be complex, especially given the unique rules regarding when you can begin taking benefits, the ways in which other earnings may reduce your pre-FRA benefits and the impact combined income can have on your marginal tax rate.

If you’re looking for advice on Social Security benefits planning, don’t hesitate to contact the financial advisors at Fullerton Financial Planning today.

Begin the Conversation with a Free Retirement Review

This isn’t a sales call. It’s a focused, one-on-one conversation about where you stand and what’s possible from here.

What We’ll Cover in Your Retirement Review


Lifestyle Goals

What do you want retirement to actually look like? Travel, freedom, family, security — we start with the life you want, then build around it.


Current Assets

We’ll review what you’ve built — and help uncover smarter ways to use your 401(k), IRA, or savings more effectively for retirement income.


Income Planning

We’ll identify where your income will come from — and how to make sure it covers what you care about without relying too heavily on the market.


Risk & Tax Exposure

We’ll evaluate how your plan holds up to taxes, longevity, healthcare costs, and market shifts — so your income stays steady, even when life doesn’t.


Long-Term Strategy

We’ll help you turn what you’ve saved into income that lasts — without sacrificing the lifestyle you worked so hard to build.


The Next Steps

By the end of the meeting, you’ll have clarity on what’s working, what’s missing, and what to do next.

What You Get With Fullerton

  • A retirement income plan built around your lifestyle goals — not a generic formula
  • A coordinated investment and withdrawal strategy that supports income for life
  • Social Security timing guidance to help you get the most from your benefits
  • A reliable income floor — often supported by high-quality annuities with GLWBs, when appropriate
  • Tax-smart withdrawal strategies designed to adapt to changing laws and future needs
  • Personalized guidance on Medicare and long-term care planning
  • A clear roadmap for RMDs, Roth conversions, and income sequencing
  • Legacy and beneficiary planning that protects your spouse and supports your values
  • Ongoing reviews and proactive adjustments to keep your plan aligned as life evolves
  • Direct access to your advisor — no call centers, no hand-offs
  • A secure client portal with full access to your plan and documents
    Invitations to Fullerton’s exclusive client events and appreciation gatherings
  • A local, retirement-minded community with shared goals and values
  • Financial confidence for your spouse and family — with clarity, not complexity
  • Experienced, time-tested guidance from a leading independent Arizona-based planning firm focused on your future

Income
Planning

A strategy to turn your savings into reliable, steady income — so your lifestyle stays on track in retirement.

Tax
Planning

Smart planning to reduce future taxes and keep more of your money working for you.

Health Care
Planning

Protection against rising healthcare costs, including long-term care, built into your plan.

Risk
Management

A clear approach to guarding your wealth from market swings, inflation, and the unexpected.

Real Estate
And Legacy
Planning

A plan for your assets and property that preserves your legacy and supports your loved ones.

Planning With Fullerton

Relationship Building

You’re not just another account. At Fullerton, every relationship begins with real conversation — taking time to understand your values, priorities, and goals. That connection becomes the foundation for a plan that’s built around you, not a formula.

Personalized Experience

No two retirements are the same. Your strategy will reflect your unique goals, lifestyle, and financial position. Everything is tailor-made: your income structured, your tax plan, and the preservation of legacy. The difference in the details — because it is built around you.

Holistic Approach

A good plan looks beyond the numbers. Your lifestyle, your family, your values — it’s all connected. That’s why our planning process considers every part of your life, not just your portfolio — leaving no stone unturned.

See What Fullerton Can Do For You

Going from "I hope this works" to "I know I'm covered".

Experience You Can Trust

Retirement is too important to trust to a generalist. That’s why for over 20 years, Fullerton Financial Planning has focused exclusively on helping people transition from work to retirement — and thrive throughout it. We’re not trying to be everything to everyone. We’re built to help you do one thing incredibly well: Turn your life savings into reliable income and lasting financial confidence.

Why Families Across Arizona Trust Fullerton

  • Over 20 years helping Arizona retirees create income that lasts
  • Trusted by more than 2,000 Arizona households — and growing
  • Independent, fiduciary-based advice — no quotas, no product push
  • Certified Financial Planner™ (CFP®) professionals on staff
  • Regularly featured on ABC15, MoneyRadio, and financial education outlets
  • Local, in-person service — no national call centers or rotating advisor teams
  • Planning approach integrates investments, income, tax, Medicare, and legacy goals
  • Collaborative relationships with CPAs, estate attorneys, and insurance professionals
  • Focused on education-first guidance, not sales pitches or one-size-fits-all plans
  • Supported by a dedicated client service team with a reputation for proactive care

“I was nervous about retiring — but they helped me see the whole picture and gave me confidence to move forward.”

— Mary J., Scottsdale


“They made a complicated plan feel simple. I wish we’d come here five years earlier.”

— Brian & Sandra T., Mesa


“They treated me like a person, not a portfolio. I never felt pressured — just supported.”

— Teresa D., Chandler


“Our old advisor never talked about income or taxes — this team gave us a plan we could actually live on.”

— Kevin M., Sun City

The Fullerton Family

Standing Strong For Clients.
Stepping Up For the Community.

Begin the Conversation

We’re here to listen, understand, and help you take control of your financial future.